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Small Business Importing: Duties and Taxes

Most Canadians are familiar with the concept of duties and taxes. You may have had to pay extra to purchase something internationally, whether during your online check-out or at your front door, because of duties and customs costs. 

If you’re someone who is now starting a small business, you might be wondering how to get goods over the border if you’re planning on working with suppliers from the U.S. or shipping your products to the U.S. 

For this reason, we’ve created a quick guide of first steps you need to take when it comes to small business shipping:

Get a business number

Before you start importing and exporting goods for your business, you’ll have to make sure your business affairs are in order. This means you’ll need to register for a business number with the Canada Revenue Agency. This business number allows you to pay and collect taxes for your business. You’ll also want to register for GST/HST, corporate income tax, and payroll tax accounts if you need them. This way, all your tax bases are covered when it comes time to import or export your goods. 

Decide if you need a customs broker

Although you might be able to figure it out on your own, it’s pretty helpful to have a customs broker when you’re going through this process, especially if it’s your first time. A broker will help you stay on top of the rules of importing and exporting, and make sure you don’t miss anything.

A broker will help with things like obtaining the release of the imported goods, paying duties, obtaining and preparing necessary documents, maintaining records, and responding to any Canadian Border Services Agency (CBSA) concerns. 

Determine taxes and any permits or restrictions

To determine taxes you’ll owe, you will need to know: the tariff classification, applicable tariff treatment, rates of duty, and tax payable when importing goods. Goods are also likely to require other permits, certificates, and/or inspection. Your broker will be a huge help to determine the duties and taxes and make sure you don’t miss anything. 

Choose a carrier and place your order

Now that you’ve sorted out all your forms, you’re ready to ship your products. The next step is choosing a carrier who can transport your goods. 

You may be tempted to go with the obvious—Canada Post or a similar widely known shipping company. Your customs broker might have advice about which carrier to use for a certain product based on your needs.

Obtain your goods

Once your goods are shipped, you can either present a full accounting and pay all duties, or get your goods released prior to the payment of duties.

Make sure you have all the required forms and information for obtaining your goods.The B3-3 Canada Customs Coding Form is the main accounting document you need to fill out, and there are others listed on the CRA website

Categories: Customs